Fraud Chronicles Roundup – Cases in the news to Feb 12, 2014

Bernard Madoff’s Former Aides on Trial

Photo of Madoff from Newsday.com

Prosecutors wrapped up the case against Bernard Madoff’s former aides Feb 11. A defense lawyer for Madoff’s ex-aides asks permission to show a video of a 2007 New York conference on the stock market’s future, in which Madoff discussed the “impossibility of committing fraud”. Employees claim they were just as fooled by Madoff as KPMG and the SEC. Read more in Long Island Newsday article

Frauds Involving Travel

Image via The Globe and Mail

Transit Fraud: A Toronto Police Investigation that started last fall has culminated with the arrests of 62 people, the latest salvo in an ongoing fight against fraudulent use of the Toronto Transit system. Toronto police break up transit-pass fraud ring, making 62 arrests and laying 200 charges. Fake passes were sold online and around schools for half the standard price. Read more at The Globe and Mail

Travel Club Membership Fraud: New Jersey couple sentenced for travel scam. The couple sold $2.6 million in phony travel club memberships, shut down companies and opened new ones when complaints rolled in. Read More at ABC News

Other Canadian Fraud News

Forgery and Fraud: Charges laid in fraud probe involving York Region law office. An Aurora, Ontario, man is alleged to have misappropriated funds from the law office where he worked, before opening his own law office – although he had no licence to practice law. Read more at CBCNews

Fraud Against CRA: RCMP have arrested 7 in alleged Canada Revenue Agency fraud. Five of those arrested were CRA officials when the offences took place. These arrests are a continuation of the Project Coche investigation which has been going on since 2008. (Read more at Global News:

Municipal Fraud: Hamilton, Ontario taxpayers may be on the hook for $1 Million fraud. A City of Hamilton Finance and Corporate Services employee allegedly confessed to stealing over $1 million over 9 years, and was fired following the confession. No criminal charges have been made to date. Read more at CBCNews

That’s The Fraud Chronicles roundup for the week ending February 12, 2014.

Do you have a news, court or regulatory body information on an interesting fraud case? Comment on this posting or Tweet @fighting_fraud to share your Web links of publicly available fraud news and case information.

Vanessa G. Oltmann
Education and integrity – the best weapons against fraud and corruption

Here is an interesting case about insurance fraud where Joanne Walker sold home, auto and business insurance, acting as an agent for various insurance companies,forging insurance policy documents, but keeping the premiums for herself. Here is the CanLII link:

Because forging J.K. Rowlings signature would have been to obvious and not nearly as ironic, the fraudster Benjamin Wilson in this case used a downloaded copy of fiction author Terry Pratchett’s signature on falsified audit reports. Ironic because in 2007, midway through Wilson’s 2003-2010 fraud, Pratchett published a fantasy novel “Making Money” featuring the vulnerabilities of financial systems. http://terrypratchett.co.uk/wp-content/uploads/2011/10/making-money_paperback_black-edition_3d.jpg

This case is also interesting because it appears that the employees of the fund were not aware of the fraud.

“He recruited new ‘mostly youthful’ employees, including two trainee traders, with no experience of trading on financial markets, the hearing was told.
‘They spent most of their time on computer simulations and rarely traded live,’ Mr Brompton said.
The employees were not accomplices and had also invested into the fund which Wilson claimed was now worth more than $100million, the prosecutor said.”

Wilson pleaded guilty in December 2013 to two counts of forgery and one of fraud and has since been sentenced to 7 years jail time.